Why can’t we be more like the USA in Higher Education fundraising?

By Steve O’Connor, Director of Development at the University of Leicester.

The University of Leicester has recently announced the single largest philanthropic gift in its history, a £7 million donation from The John & Lucille van Geest Foundation which will transform the fight against cardiovascular disease for years to come.

But how did this happen and what lessons does it hold for fundraising activity in British Universities?

The potential of philanthropy to transform the Higher Education landscape is much in evidence in the USA where private donations and fundraising for your alma mater is de rigueur and can run into hundreds of millions of dollars. Philanthropy is entrenched in the DNA of US universities – and their alumni and friends – in a way that is not recognisable in the UK and the Development profession has grown and flourished. For them, it is not a matter of whether to invest in well oiled fundraising operations covering the whole range of promotion from volume direct marketing to legacy giving backed by well resourced alumni and stewardship programmes but how much, where, and when.

Some wonder why British universities are not more like their US counterparts and why more is not invested in Development activity. Since investing seriously in a professional Development team Leicester has doubled its philanthropic income every year for the past three years and the 9:1 return on this investment would be hard to match anywhere. Leicester have also seen a dramatic increase in donors with some of the largest donations, in common with the wider sector, coming from non alums that see universities as a very worthy and unique recipient of their beneficence.

Philanthropy generally across the UK higher education sector is also growing, with an increasing number of individual gifts of £1 million or more being made to education. The sector raised over £600 million in philanthropic income in the 2011 financial year – 14% up on the previous year. While the Russell Group still dominates, Leicester’s latest donation is further proof that donors are also choosing to support world leading research at universities in the 1994 Group and more widely. This is a very competitive arena and we shouldn’t underestimate the challenge of competing with Oxbridge, but we are equally capable of attracting big donations and our work deserves it

In the US one also does not need to look far for willing and influential volunteer leadership to give, get and influence. In the more mature institutions it would not be unusual for members of the Development Board to pledge $1m+ gifts as an accepted part of their role and before the first meeting.  Of course those who have benefitted from this system of Higher Education see it as their duty to give back and not only to their alma mater.

The history of the development of American universities is based on a level of giving and investment in fundraising which is not reflected in the UK and is supported by a tax system designed to encourage giving every step of the way.  According to the Chronicle of Higher Education philanthropic income for all education reached £38.79billion in 2011.

Put very simply, it could be said we lag dramatically behind our American counterparts in both the investment in fundraising and the philanthropic yield.  Why can’t we be more like them and invest more in Higher Education fundraising?

Some claim that UK universities just don’t have the same will or fundraising ‘know how’ to ask for money. Perhaps there is uneasiness in the UK about being seen too much as a charity case and to be walking ‘cap in hand’.  And in any case won’t the ‘richer’, more established universities just become stronger?  But don’t the figures on both sides of the Atlantic speak for themselves and surely won’t more UK universities facing tougher economic times now follow suit?

The HE sector in the UK is facing the most challenging economic period in the last 50 years. A total of £940m has been cut from the budget for teaching, research and buildings for the 2011/2012 academic year; a sizeable 12.6% reduction. It seems there is little choice but to look to philanthropic support to close any funding gap and ensure universities continue to grow and flourish. But will philanthropists respond? One would think the UK would adopt more of the American Development Office model and more quickly invest further in Fundraising.  However and amazingly, the word is that some UK universities are reducing development staff or holding back on investment in a very short-sighted attempt to cut costs.

It is a fallacy to suggest that the UK has no history of higher education fundraising. Victorian and post war benefactors led the way in the relief of poverty and the advancement of Education. The University of Leicester, in common with many of its peer universities, was founded on a (legacy) gift in 1921. Today there is also a growing band of modern day philanthropists willing, ready and able to make a difference – just read the philanthropy section of The Sunday Times Rich List; giving is good.

Leicester may have been tempted to ignore the fundraising opportunities, but the Vice-Chancellor and senior management team had the vision to realise the growing importance of philanthropy in higher education. They were prepared to back and fund the necessary steps needed to attract the very best practitioners and wait to see significant fundraising returns.

British universities have grown from a very different source than the American universities and as a nation we are still very much wedded to the principle that the State has the primary responsibility to ensure that education is available for all, regardless of their ability to pay or an institution’s historical ability to fundraise.  The received opinion is that we like some of what we see in the States but we don’t want to adopt the whole model.  The way forward in the coming decade is of course to find the balance that best suits us between State, Research Councils, philanthropic, commercial, enterprise and other funding.

Despite the present economic climate, the number of millionaires and billionaires in the UK is rising, and while not all are philanthropically minded, many want to give and they want us to open the discussion and ultimately ask them for support. We may be experiencing tough economic times but as institutional leaders and Development professionals we should dare to believe that more of those least affected are keener than ever to explore how they can give back.

Philanthropists are, by and large, not interested in the funding core essentials but they will help us to do things we could not otherwise have done or do more, quicker and faster. Unfortunately it takes time to move from the ground floor of fundraising and there will always be others like Oxbridge who are 700+ years ahead of the game. Once we have seen the benefits of philanthropy and are convinced by the economics, it is not a huge step to investing in a professional Development Team and starting to move up the fundraising ladder.

While it may not yet be raising funds on the scale of a comparable American university, Leicester has recognised and chosen to invest in tapping into the potential that does exist for British institutions on our side of the Atlantic. The record donation from the John and Lucille van Geest Foundation shows what can be achieved, if development and fundraising leadership in universities is fully supported and backed by all.  And of course there are few better endorsements for institutional self-belief and confidence.

Steve O’Connor is the Director of Development at the University of Leicester.

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